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COMPARISON OF INFORMATION AND PERFORMANCE INDICATORS

COMPARISON OF INFORMATION AND PERFORMANCE INDICATORS

LEARNING OBJECTIVE

  1. CURRENT AND PREVIOUS PERIOD
  2. CURRENT PERIOD AND BUDGET
  3. PRODUCTIVITY RATIOS
  4. MEASURING PROFIT CENTRE PERFORMANCE
  5. MEASURING INVESTMENT CENTRE PERFORMANCE

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Download Lesson:COMPARISON OF INFORMATION AND PERFORMANCE INDICATORS

3. PRODUCTIVITY RATIOS

Production is the quantity of goods or services that are produced. Productivity is a measure of how efficiently those goods or services have been produced.

Productivity is often analyzed using three labour control ratios:

  1. Production volume or activity ratio- the production volume ratio

assesses the overall production. Over 100% indicates that overall

production is above planned levels, and vice versa.

=Actual output measured in standard hours/budgeted production  

     hours x 100%

  1. Capacity utilisation ratio-indicates worker capacity, in terms of the

hours of working time that have been possible in a period.

     = actual hours worked/budgeted hours x 100%

  1. Efficiency ratio- an indicator of productivity with the benchmark being

100%.  Actual output measured in standard hours/actual production hours

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